FTC appeals Georgia case to U.S. Supreme Court

Attorneys for the Federal Trade Commission have filed an appeal with the U.S. Supreme Court seeking to stop the acquisition of a hospital in southwest Georgia by the public body that owns the healthcare provider’s only competitor, Phoebe Putney Health System. The FTC says the $198 million acquisition of Palmyra Medical Center by the Albany-Dougherty Hospital Authority illegally consolidates the market for acute-care hospital services in a six-county area, raising a strong risk of higher healthcare prices. The commission has waged a yearlong court battle to stop the Dec. 9 purchase, losing at the federal district and appeals court levels. The hospital authority legally owns the only other hospital in Albany, which is operated under a $1-a-year lease by an independent not-for-profit, Phoebe Putney Health System. At the heart of the case is a legal principle in Supreme Court case law called the “state action doctrine,” which says states and their political subdivisions may take anticompetitive actions in some cases that would be illegal if private companies tried the same thing. Attorneys for the Georgia hospital authority say they have the legal right to consolidate Palmyra into Phoebe Putney Health System because its public ownership exempts the transaction from federal antitrust laws. The FTC says that argument is a pretext for shielding what is essentially a private transaction, since the authority took no steps to engineer the purchase of Palmyra from its former owner, for-profit HCA. Rather, executives with Phoebe Putney Health System negotiated with HCA and then presented the deal and all its terms to the authority for approval, according to court records.